Scottish Legal Review: Can we settle out of court?

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A hot topic of conversation among Scotland’s litigators over the last year has been the Civil Litigation (Expenses and Group Proceedings) Bill, which was passed by the Scottish Government in May, with secondary legislation yet to be enacted.

It aims to add clarity over legal expenses and sets a cap on success fee agreements. It also introduces qualified one-way cost shifting, meaning that pursuers of a personal injury action may no longer face legal costs if they are unsuccessful. An increased work flow for litigators is anticipated as a result.

“This will take away some of the financial risk from pursuers in court cases,” believes Stephen Goldie, head of litigation at Brodies.

“We are active in the insurance and risk sector so we have a number of insurance and risk clients that we act for. If you take away the cost risk for the pursuer, then it may lead to an increase in the number of cases, where people otherwise might think twice about starting the claim.

“At the moment, the situation is that if you are the pursuer and you start a case and you lose it, you have to pay the defender’s legal expenses.

“With this qualified one-way cost shifting, it is going to take away that financial risk from the pursuer.

“So if you factor things like that in to the current climate, then I think we could see an increase in litigation.”

It has been a busy year for the dispute resolution and litigation team at Brodies, particularly with constitutional Brexit-related issues.

Litigation partner and chair of the firm Christine O’Neill acted as junior counsel in the Scottish Government’s legal team in July, when the UK Government challenged Holyrood’s Brexit Continuity Bill.

The team’s other areas of focus have been health and safety, contentious construction and regulatory issues.

Meanwhile Gary Moffat, litigation partner at Burness Paull, is focused on the legislation’s creation of group proceedings, similar to the US’s class-actions which have the aim of reducing legal costs for individuals.

He points to the firm’s acting on behalf of the manufacturers of allegedly dangerous mesh implants and hip replacements, which have been widely reported on.

He says: “The way [these kinds of cases] run at the moment is that you have every individual who has been impacted by the issue raising one action, so if you have 100 people then 100 separate processes have to go through. Under a class action you would group together into one big case. That is the biggest change we will see coming out of it and we are doing that already.”

Moffat’s team also reports a busy year for 2018 and, with four significant fraud cases worth a total of £10 million running, there are no signs of business slowing down. He predicts health and safety will be a driver of growth for 2019 as his team are involved in separate upcoming fatal accident inquiries into helicopter crashes at the Clutha Bar, in Glasgow, and off Sumburgh, in Sheltand, which both occurred in 2013.

While litigation involves court, mediation is a quicker, private alternative form of dispute resolution and is something John Sturrock QC, senior mediator and chief executive of Core Solutions, predicts will be used increasingly in the near future.

He says it “enables the key players, the real decision makers, to confidentially explore the legal, commercial and technical points and negotiate agreements, usually in one day.”

The key, according to Sturrock, is that the people affected can retain control over the outcome instead of a third party making a decision on their behalf.

At the beginning of October, the Scottish Parliament published a report entitled “I Won’t See You in Court: Alternative Dispute Resolution in Scotland” and called for increased use of alternative 
dispute resolution methods, 
including mediation.

Sturrock says that the courts are now thinking differently about litigation as a last resort. He adds: “I think that the awareness of the benefits of mediation is growing among the institutions and businesses that traditionally might have used litigation. This seems to herald a real change in culture and attitude in use of mediation.

“There is a worldwide movement away from litigation, Scotland has been part of that and we progress quite quickly sometimes.

“But around the world people are using mediation much more as an alternative to litigation to speed up dispute resolution. I think that is going to continue.”

This article appeared in the Scottish Legal Review 2018. A digital edition can be found here.